The Board of RCL approves the Responsible Investment, Engagement and Proxy Voting Policies.
The Portfolio Managers (PM’s) drive the RI agenda.
The responsibility of incorporating ESG into the investment process sits with the Investment Team. Investment Analysts and Portfolio Managers are responsible for identifying and assessing relevant ESG factors. A discussion of these factors is included in stock initiation and research reports and are explicitly factored into valuations via adjustments to the company’s earnings forecasts and / or valuation multiple, where applicable.
ESG is an important component of Investment Team staff variable remuneration.
RCL formed an ESG Committee during 2019 which includes staff from all areas of the business, including the investment team (portfolio manager, investment analyst and quantitative analyst), operations, client service, and the Managing Director. The focus of the committee is to continually review and improve our approach to ESG matters including:
- How ESG is formally included in the research process – while ESG has been incorporated in the investment process (particularly around governance), the focus is on ensuring that there are key consistent questions asked of investee companies regarding their sustainability practices, disclosure, and progress against stated ESG related targets
- Investigating additional reliable and comparable sources of information / data to supplement analytics and be incorporated into our proprietary research database
- Expanding the knowledge base of all RCL employees regarding ESG, rather than just having one or two specialists within the company
- Providing quarterly updates to the Board on ESG related activities